Investments around the Raleigh/RTP Area in NC

Raleigh, North Carolina
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Investments around the Raleigh/RTP Area in NC

William Meng
Member since 2021 · 2 posts · 0 votes

Hi,

We have been looking to invest in a single family home around the Raleigh area in NC and would appreciate any advice from the fellow members of the BiggerPockets community. We like the area for a couple of reasons. The area has seen very strong population growth over the past few years as well as an influx of employers and businesses. The state overall has seen growth in its population as many migrate in from other states. Next, we love the state and its climate, and see it as a potential destination for a winter home when we have the time a few years down the line. For now, we would rent out the house and prefer to have a positive cash flow on it. 

We are specifically looking at homes in some of the suburbs such as Holly Springs, Apex, and Wake Forest. Our criteria is around 1500-2000 sq ft, a maximum age of 30 years old, and a budget of $450k. What do you guys think about the area and the cities I mentioned? Any other suggestions for areas that offer good value, are safe, and easy to find tenants? Any places that you would stay away from? 


Any advice is greatly appreciated!

Will

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Tiffany Alexy
Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes
4y

Will,

Those areas are nice, and it's true the Triangle has been experiencing a lot of growth these past 5-10 years.  Because of that, much of that growth is already priced in.  Your budget is healthy, but to get positive cash flow on that will be tough.  It's going to depend on a lot of factors, age/condition of the home, etc.  Rents have been going up pretty significantly these past 2-3 years as well, so its possible that it may not be cash flow positive now, but could be in the future, especially if rates drop and you're able to refi.  But I don't foresee that happening at least in the next few years.  

I'm an agent and investor and grew up in Cary, so happy to chat more if you have any questions.

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  • Tiffany Alexy
    Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes
    4y

    Will,

    Those areas are nice, and it's true the Triangle has been experiencing a lot of growth these past 5-10 years.  Because of that, much of that growth is already priced in.  Your budget is healthy, but to get positive cash flow on that will be tough.  It's going to depend on a lot of factors, age/condition of the home, etc.  Rents have been going up pretty significantly these past 2-3 years as well, so its possible that it may not be cash flow positive now, but could be in the future, especially if rates drop and you're able to refi.  But I don't foresee that happening at least in the next few years.  

    I'm an agent and investor and grew up in Cary, so happy to chat more if you have any questions.

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  • Pat LulewiczBusiness Member
    Realtor · Raleigh NC and Greensboro, NC · Member since 2019 · 393 posts · 392 votes
    4y

    If you're looking in the burbs, I wouldn't ignore Durham, Garner, Clayton and Knightdale if you're trying to be in the Triangle in general,  though your 30 yr max might limit available inventory for you in some of these areas.

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  • William Meng
    OP
    Member since 2021 · 2 posts · 0 votes
    4y

    Tiffany and Pat, thanks for the responses!

    Do you think that the area will continue to grow over the next few years? Perhaps some of these suburbs that are farther out might be good opportunities as the larger cities get more populated and expensive. What would you say is the typical rent for a 1500-2000 sq. ft. 3 bed/2bath home in some of the cities that I mentioned? 

    Pat, thanks for those suggestions. We avoided Durham as we heard that it has higher crime but we honestly don't know the area very well. I will look into some of the places that you mentioned. Any other areas that should be avoided due to high crime etc.? I do know that the Raleigh area is very safe in general. 
     

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  • Shane Lafleur
    Real Estate Agent · Holly Springs, NC · Member since 2020 · 170 posts · 161 votes
    4y

    To add onto @Pat Lulewicz and @Tiffany Alexy's expertise here, I agree that the location, budget and growth are all working in your favor. To that point you are going to find it hard to get 1st year cashflow off of a long term renter as the rents are just not at that point in this market. If you are open to running a short term rental or willing to co-host with someone who does, then you might be able to cashflow relatively well with this strategy.

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  • Chris London
    Property Manager · Raleigh/Durham NC · Member since 2015 · 210 posts · 293 votes
    4y

    @William Meng Currently, my 2 hottest city picks for the Triangle are Durham & Holly Springs.

    Both cities have the largest potential for long-term growth and appreciation.

    Durham continues to gentrify and the crime you mention in your post above is happening in small pockets of neighborhoods that have the greatest potential for growth. The best example is Central Durham (near NCCU). Walking distance to both downtown and the ATT.

    Great Central Durham example: This house/flip sold in April '22 (3 months ago) for $575K with a current estimate of $613K. This house (also a flip that was purchased in '21 for $165K) a few doors down is for sale right now for $284K. Also, this 6 bed/2700 sqft house waiting for a overhaul (or exorcism) for sale currently for $195K. Central Durham is walking distance to downtown where they are now building $1M+ condos. Large potential upside to Durham.


    Holly Springs on the other hand is a city whose Mayor 20+ years ago paved the way for a planned community that is now growing faster then any of the other bedroom communities in the Triangle with maybe only a comparison to possibly Pittsboro. Your $450K would get you a beautiful 4 bedroom home like this in HS.

    CNBC article that came out today: North Carolina ranks No. 1 in America’s Top States for Business, with the nation’s strongest economy

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  • Tiffany Alexy
    Real Estate Broker · Durham, NC · Member since 2014 · 236 posts · 168 votes
    4y
    Quote from @William Meng:

    Tiffany and Pat, thanks for the responses!

    Do you think that the area will continue to grow over the next few years? Perhaps some of these suburbs that are farther out might be good opportunities as the larger cities get more populated and expensive. What would you say is the typical rent for a 1500-2000 sq. ft. 3 bed/2bath home in some of the cities that I mentioned? 

    Pat, thanks for those suggestions. We avoided Durham as we heard that it has higher crime but we honestly don't know the area very well. I will look into some of the places that you mentioned. Any other areas that should be avoided due to high crime etc.? I do know that the Raleigh area is very safe in general. 
     


     I definitely think the area is going to continue growing.  We have so many continuing to move here from other parts of the country.  Lots of job and economic growth which is fueling everything.  It's not just a "pandemic" boom that we are experiencing... we were experiencing a lot of growth even pre-pandemic.

    As far as average rent, you're looking at $2000-$2400 for a home of that size.  It depends on condition, location, amenities etc but that's about what you can expect.

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  • Matthew E Weber
    Augusta, GA · Member since 2022 · 13 posts · 11 votes
    4y

    @William Meng Raleigh, Durham and Chapel Hill are great areas attracting a lot of investors right now. The triangle has a lot of traffic from big tech coming in. With that said due to price and interest increases all of the investors my company and I work with are approaching many deals from a flipper perspective versus cash flowing rental. The brokerage I represents works specifically with investors and I have seen the most traffic for rentals with cash flow as the main objective happening in the outlying areas like those previously mentioned along with Fayetteville about an hour south, Rocky Mount an hour east and Burlington an hour west. Would love to talk more about your buy box and the local area for investors.

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  • Mike Casper
    Member since 2020 · 2 posts · 1 vote
    4y

    This is all great info, thank you OP and replies!  
    I’ll be moving my family to the area in 18 months or so. I’m trying to get a handle on the area as well. 

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  • Joseph Chevalier
    Member since 2022 · 2 posts · 0 votes
    4y

    I know someone that is thinking about selling their 3 story town house in Apex for $450k.  It was built in 2007.

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